Facebook pays Microsoft $550 million

Facebook has said that it will write a cheque to Microsoft for $550 million for hundreds of patents that originated with AOL.

The deal gives social network Facebook 650 patents and patent applications and licence to another 275 patents and applications, to defend itself from an expected onslaught of patent trolls after its IPO.

According to Reuters, the patents, which Microsoft bought this year from AOL, cover things tile mobile services, mobile phone handsets, advertising and e-commerce.

Microsoft bought the patents for a billion dollars. Although it has sold them to Facebook, it will still get protection from them as part of the sale deal.

The auction included technology rights from AOL’s current and former businesses, including Netscape and instant messaging service ICQ to MapQuest and early online service CompuServe.

Microsoft always planned to sell a large number of them while retaining licences to them so it is in a win win situation.

Facebook was in the bidding process for the AOL patents, but it seems that Microsoft took it to one side and said “if we buy the lot, we will give you half for a reasonable price.” Microsoft is a heavy backer of Facebook.